As One Team
There is a significant amount of overlap between the compliance and vendor management roles. They both deal with outsource partners and both have a responsibility to see that those partners comply with contractual and compliance requirements.
I have partnered with many issuers and acquirers over my years in payments. As I mentioned in my last post, most of them were very ineffective in compliance or vendor management. If they did have these roles defined, they were typically, understaffed and so separated from each other that their interactions were more tactical and confrontational rather than strategic and cooperative.
I do remember one exception.
At one point in my Mastercard career, I was embedded for five years with the Cards Division at CIBC, a major Canadian bank. During that time, I was tasked with researching their infrastructure to create and implement the best solution for them to operationally integrate Mastercard into their current product offering across the full CIBC banking environment.
I got to know their shop very well.
The CIBC team that was my “home away from home” was their Outsourced Applications Support (OAS) team. The team’s leadership had carefully chosen experienced staff from other CIBC teams (Fraud, Customer Support, Dispute Resolution, etc.) to build this team.
The OAS team’s mandate included the following:
Vendor Management: This team managed technical and compliance interactions with their outsource partners. They were responsible for keeping the vendors accountable for their contractual obligations.
Outsourced Application Support: This team provided the bank’s internal front-line support for applications from outsource partners that were used by other teams at the bank.
Compliance: This team owned the compliance releases for the bank. They ensured that their own internal teams and outsource partners not only complied with release requirements but did so in a way that aligned with the bank’s expectations and strategic direction.
This structure and mandate gave the team:
Depth of knowledge: The team members had past experience that covered each of the departments using outsourced applications. As well, since they used the outsourced applications frequently, their experience was kept current.
Perspective across the organization: By being in regular contact with each of the outsource partners and the internal users of those outsourced resources, this team had a constant view of the process and data flow as provided and as used.
The ability to effectively manage vendors and their compliance: Outsource partners knew this team. They were kept accountable by this team. The vendor responses and support had to be effective because their effectiveness was constantly being monitored.
This team had a tactical and strategic pulse on vendor effectiveness because this team supported the bank’s internal teams using the vendors’ tools. They had direct insight into the compliance requirements from payment networks and legislation, as well as direct oversight on how those requirements were implemented by their outsource partners.
There were significant challenges for this team to navigate. These three roles, in most organizations, are often in competition and conflict with each other. This team had to work through those tensions as one team.
Over time, I watched as the bank began to divide this team into multiple teams – each focused on one responsibility: vendor management, compliance, or internal user support. By the time they were completely separated, I was no longer embedded at the bank. I have often wondered if the magic they had as one team was able to survive the reorganization.
Based on what I saw and experienced over those 5 years at CIBC, I would strongly recommend that your Vendor Management, Compliance, and Internal User Support for outsourced applications be one team.
Your corporate structure may require that these teams reside in different departments. If so, they need to work closely together as though they were one team. Otherwise, they will struggle with conflicting priorities and the inability to manage all aspects of their roles effectively.
Here are three suggestions that may help mitigate the weakness of having these roles divided:
Tie them to one management accountability: If they must be separate teams, have them report to the same Manager or Director. Bringing them together at a VP level may work in a small credit union but it is too remote a link to be effective in a larger financial institution.
SWAT Team: Bring together the best of each team into a SWAT team. Together they can triage compliance releases, analyze vendor effectiveness, and provide expert insight from each of their roles. The SWAT team needs continuity to be effective, tenure on the team to be cohesive, and fresh participants cycled in to better propagate the SWAT cooperation paradigm to the contributing teams.
“Coach” leadership, not “superstar” leadership: Too many “leaders” use their teams as ladder rails to help the “leader” to climb higher in the corporation. These “leaders” have little to no desire to cooperate with other departments as their goal is personal, selfish, and, ultimately, destructive to the organization. You need “coach” leaders who understand that success is accomplished by bringing out the best in the team. Cooperation between teams is the way to bring out the best in the corporation. Any personal acclaim and promotion are secondary to and a result of the success of the team and the company.
These three points build on each other. Together they can help your company find greater success by having your Vendor Management, Compliance, and User Support teams become strategic partners in that success.